The Stationers Guild

In a not too surprising development, it was announced yesterday that Shutterfly would acquire Tiny Prints for over $300 million in cash and stock.  The terms of the acquisition are somewhat complicated but not unusual in this type of acquisition in that institutional shareholders (read private equity firms) will not be allowed to sell their shares for 6 months and the managing partners of Tiny Prints who collectively own 12% will be locked in for 18 months.

What does this all mean?  Firstly, this is a great deal for the shareholders of Tiny Prints whose growth potential appears to have stalled as both Tiny Prints and Wedding Paper Divas are beginning to find it increasingly more difficult to differentiate themselves at the high end of the custom invitation and announcement market.  As long as the share price of Shutterfly doesn’t fall over the next 18 months, the Tiny Prints shareholders will be well compensated for their original investment.   I suspect that there will be a significant fall in the price of Shutterfly beginning in the fourth quarter as private equity firms jettison their shares.

Secondly, this is a very aggressive move by Shutterfly to diversify their sources of revenue and income.   Shutterfly operates at the low end of the market with an average sale of $32.88 in 2010 ($44.41 for the 4th quarter).    How will Tiny Prints’ strategy of paying over $50 in search marketing expenses to acquire a single sale resonate with Shutterfly’s Walmart and Target marketing focus?  Clearly, there are advantages to help smooth out the seasonality of  Shutterfly’s business with the addition of Tiny Prints’ baby and wedding business, but is it enough to offset the fact that over 50% of Shutterfly’s revenues occur in the fourth quarter.    Personally, I suspect that Tiny Print’s product offerings will diminish in quality and price (they were already moving in that direction) rather than lift the quality of Shuttefly’s overall product offering which is firmly entrenched at the lower end of the market.

Thirdly, what does this say for the wedding invitation and baby announcement business as a whole?  As readers of the Stationers Guild are aware, this is just another step in a consolidation process to protect margins at the lower end of the market.   It is a question of rationalizing cost structures to compete in the mass-market.   There is no end of competition in this market segment.  For instance, Paper Culture has immediately jumped into this marketing milieu by promoting its environmental qualifications when compared to Shutterfly and Tiny Prints.   How reassuring it is to know that Paper Culture is planting a tree for every order that they receive.  Does this make Paper Culture green?  The co-founder and CEO of  Paper Culture is Christopher Wu, whose background is in technology.  With  jobs at Yahoo, Microsoft and HP, Mr. Wu doesn’t strike me as one who is a spokesperson for either the stationery industry or the environment.    Are consumers just being played?  You be the judge.

If you are confused, you should be.  There is a lot going on in cyberspace as online marketing heavy-weights compete for visibility.   The hype has reached outrageous proportions and only reconfirms what Eric Schmidt, the former CEO of Google, said about the internet:  It is a “cesspool” of misinformation.  For those of us who value the craftsmanship that goes into making fine paper,design and custom printing, we are witnessing the digital footprint of the barbarians reducing a proud industry to recycled scrap paper.  Personally, I don’t think the consumer will be so easily conned and the only way these online behemoths will able to compete is on price.  This is a sure recipe for disaster.

Well done Tiny Prints.  You got out at the right time.  Hopefully Shutterfly won’t collapse until you have had an opportunity to sell your shares.

As readers of the Stationers Guild News are aware, I have long pointed out the hazards of trying to find “cheap wedding invitations” online.  It is not that they are not available.  In fact, there are over 14 million search results when you enter the search term “cheap wedding invitations” in the Google search bar.  What I am referring to is the self-serving and deceptive techniques used by many vendors to attract unsuspecting visitors to their website.  These deceptive advertising practices are undermining the credibility of online search and, in my opinion, fradulently promote websites and products under the guise of advice. 

Today, I came across a Blog posting from Wedding Layers offering advice on how to find cheap wedding invitations.   The text of the article was lifted from an Ezine article written by Kim Lapp and contains eleven embedded links to the website of  Tiny Prints which just happens to sell wedding invitations (no other vendor sites are listed) .  The issue is not that one should not offer genuine advice on “wedding invitations,” but to shamelessly promote another website under the pretext that you are offering the consumer meaningful  information as a “detached” expert is a sham.

I have no difficultly with self-promotion if it is labeled as such, but “advice” and “news” and “recommendations” that are clearly self-promotional and not properly disclosed as such are an insult to the consumer and may, in fact, be illegal under recent Federal Trade Commission (“FTC”)  guidelines.  Tiny Prints and its sister company, Wedding Paper Divas are experts at self-promotion.  Buyers beware, you may not be receiving objective advice!

Richard W. May
Therese Saint Clair

The first quarter of 2010 will determine wedding invitation trends for the year.   In fact, I suspect that wedding invitation designs have pretty much been defined long before the “Will you marry me?” question was asked this holiday season.  I have it on very good authority that this is so:  Google.

Google Trends tracks the number of web daily searches for a particular term (in this case “wedding invitations”) over the course of a year.  As the chart above demonstrates, searches for “wedding invitations” peak toward the end of the year and early January and then begin to tail-off rather significantly after the first quarter.  The chart above also compares the search term “online wedding invitations” (shown in red) to “wedding invitations” (shown in blue).   As suggested by the chart, prospective bridal couples do not feel the need to distinguish between wedding invitations sold online and those that are offered exclusively through storefront stationers.

The New York Times (December 29, 2009) reports that bridal magazine ad pages are down significantly in December, 2009.   Quoting sources the Nielsen Company and Mediaweek, bridal magazine ads for December, 2009 were down 8.4% in Brides magazine, 25.5% in Bridal Guide and 23.9% in Martha Stewart Weddings.   While ad pages are booked far in advance and certainly reflect the rather depressed economy, the battlefield for wedding invitations has shifted to the Internet and the public is indeed poorer as a result.    As I have written on numerous occasions, low image resolutions, limited customization options and the inability of the online client to compare different papers and printing processes greatly diminishes a company’s ability to distinguish their brand.

It is interesting to note, that of the top 10 companies listed on the first page of Google for the search term “wedding invitations,” only one is a credible printing company:  Crane & Co.  Not surprisingly, Wedding Paper Divas, remains in the top position.    It does so because it has the most aggressive and intelligent application of paid search and Search Engine Optimization (SEO) strategies of any company in the business.   In a revealing New York Times article, Tiny Prints (a sister company of Wedding Paper Divas), describes how it competes for holiday greeting cards and photo cards by paying up to $50 to acquire a client.   I would suspect that they will pay that and possibly more to acquire a client willing to purchase a wedding invitation online.

While Wedding Paper Divas has certainly upgraded its line in recent years with companies such as William Arthur merchandizing their line through them, one wonders whether this business model is sustainable.    In fact, William Arthur now sells directly online and other companies such as Minted offer a wider range of quality invitations from craftspeople who do not generally market their equisite designs online.

For those seeking quality wedding invitations coupled with superior customer service, I strongly recommend that you visit a stationer in your neighborhood.    Most of these stores carry a far wider range of wedding invitation samples than any online dealer.  Customization options are limitless and you can actually feel the paper samples and see how ink colors change depending on the printing process.  In 2010, do yourself a favor and see why choosing your invitation in person makes all the difference in the world.